[Superman]

In another thread, we got started with an interesting min wage discussion. Gaijinda and John were good enough to share some significant observations:
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Gaijinda
Supe - I do think your heart is in the right place. A working person, no matter how humble their job should be able to support themselves. But this is impossible to put on the backs of employers. Burger flippers making $15 per hour?? Make way for automated-burger-making machines. Look around your world and see all the folks making the minium wage - push that too high and you are looking at all those folks not being employeed at all. So a kid living with their parents, let them make the $5 or whatever. And someone with a family and other deductions (healthcare, rent, college loans), let them get an "earned income" tax rebate. All should work and all work should be respected. This is a basic rule for any society to florish. We kind of forget these things some times..
Well spoken Gaijinda. People tend to forget all kinds of things when their clarity of thought is obscured by the miasma of Socialism.

"Why not just make the minimum wage $50 per hour?"

Well, in order for wages to increase, productivity has to increase by a corresponding amount.

Let's take Jim's example of a fast-food place in Oregon, which has a state minimum wage of $7.05 per hour.

Now, McDonald's corporation serves 47 million people per day at over 30,000 restaurants globally. That's an average of 1,566 customers per restaurant per day, or 130 customers per hour. (You have to figure that the majority of customers are in the USA, but that's the only data in the Annual Report and I'm not spending any more time on this example than absolutely necessary to destroy the argument) Let's further assume that the average size "crew" consists of two burger flippers (anecdotal data gathered by ME) or 65 burgers flipped per hour.

Now, if you want to double the minimum wage for those flippers (let's euphamistically call them Meat Inversion Technicians) without increasing the cost of the burger, then you have to have each do double the work. If their PRODUCTIVITY increases to 130 burgers per hour, then you can afford to pay them double. But in the absence of increasing demand for burgers, you only need ONE M.I.T. So you fire the other one.

Next time you're at a high-volume McD's, look behind the counter. It's entirely possible that you will see the substitution of CAPITAL for labor in the form of an automated soda-filling machine. There's an equilibrium point where the cost of wages rises to the point where substituting a machine is more efficient than hiring a marginal worker. (Which has NOTHING to do with the worker's productivity, it's an economics term).
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John Cramer

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